PEC of the five-year period boosts Brazil’s spending on Justice, which is already a record

The Senate plenary may vote in the coming days on the proposed amendment to the Constitution (PEC) 10/2023, the controversial PEC of the five-year period, also called “PEC of privileges” or “PEC of penduricalhos”. The text creates an additional 5% every five years to the salaries of magistrates and members of the Public Ministry (MP), in addition to other categories that were included later.

The controversy is due to the expense that will be incurred to create the benefit, aimed at careers that already have high salaries, compared to other public servants. A recent survey by the National Treasury showed that, among 53 countries surveyed, Brazil is the one that spends the most public resources on courts of justice.

The proposal is from the president of the Senate, Rodrigo Pacheco (PSD-MG). In a substitute already approved by the Constitution and Justice Committee (CCJ) of the House, the rapporteur, Eduardo Gomes (PL-TO), accepted amendments that extend the advantage to members of the Public Advocacy of the Union, the states and the Federal District, the Public Defender’s Office, delegates and ministers and advisors from audit courts.

In addition, other public servants who, “due to constitutional provision or the respective governing laws, are prevented or choose not to carry out other remunerated activity” may also have access to compensation.

According to the text, the extra portion will be calculated on the base subsidy every five years up to a limit of 35% additional. The adjustment is not included in the calculation of the constitutional ceiling, the maximum amount that each public servant can receive. Furthermore, the proposal ensures the counting of time prior to the eventual date of publication of the constitutional amendment, if approved. Still according to the proposal, the additional will also apply to retirees and pensioners who enjoy the right to equal income with their working colleagues.

The Senate Budget, Inspection and Control Consultancy calculated that the fiscal impact of the measure until 2026 would be at least R$81.6 billion for the federal government and states, if it were in force throughout 2024. According to a note technical body, the impact would be R$25.8 billion in 2024, R$27.2 billion in 2025 and R$28.6 billion in 2026.

But the consultancy technicians also highlight that the PEC “introduces an indefinite authorization for extension to any positions and careers by acts of the Powers and autonomous bodies of each entity, which prevents the identification of who the additional beneficiaries would be”.

Thus, “the effect of the portion relating to the other possible extensions of the benefit permitted by the text of the proposition is materially impossible to calculate, given the impossibility of specifying what these positions would be”. Therefore, the R$81.6 billion would represent “a fraction of the fiscal impact” of the PEC, according to the technical note.

The government leader in the Senate, Jaques Wagner (PT-BA), said, on the day the proposal was approved by the CCJ, that the impact could reach R$42 billion per year depending on the number of public careers benefited. The estimate is in line with that of the Ministry of Finance, which calculates something around R$40 billion and sees the PEC as a bombshell for public accounts.

Judiciary concentrates the highest salaries and spending in Brazil is the highest in the world

For the Public Leadership Center (CLP), an organization that works to defend the more efficient use of public resources, the approval of the PEC would contribute to the increase in salary inequality, causing many of the benefited employees to earn above the civil service ceiling. .

“The five-year PEC goes in the opposite direction of the search for greater efficiency in the public sector, increasing the number of harmful incentives. Many civil servants, especially in the Judiciary, enter the public sector with high salaries, and with progression occurring mainly based on length of service or obtaining certificates and not based on delivery of results. The consequences of such distortions are twofold: both the low quality of public services and the high weight of personnel expenditure in the public budget”, states the entity.

A study published by the Institute of Applied Economic Research (Ipea) in 2021 showed that the Judiciary is the power that concentrates the highest salaries in Brazilian civil servants. The average salary (R$ 12.12 thousand), according to data at the time, exceeded triple that paid by the Executive (R$ 4.03 thousand).

As shown in the blog of journalist Lúcio Vaz, from People’s Gazettesalaries, compensation and other trinkets paid in the Brazilian Justice system totaled R$95 billion in the last six and a half years.

Of this total, salaries themselves consumed R$56 billion. “Concidental rights”, plus R$29 billion, while “personal rights”, another R$2.4 billion. Compensations – health benefits, food, housing, birth, pre-school – totaled R$7 billion.

The National Treasury Expenditure Bulletin released at the beginning of the year also showed that Brazil is the country that spends the most public resources on courts of Justice, out of a list of 53 nations.

In the sum of the Union, states and municipalities, the public sector allocated approximately 1.6% of the Gross Domestic Product (GDP) to the courts in both 2021 (1.61%) and 2022 (1.58%). This item includes expenses with state and regional courts of justice, the Federal Supreme Court (STF) and the Public Ministry, among others.

Brazilian spending in this area corresponds to four times the average spending of the 53 countries on the list (0.4% of GDP). According to the Treasury, advanced economies allocate an average of 0.3% of GDP to the courts. In emerging economies, average spending on the Judiciary corresponds to 0.5% of GDP.

Apart from Brazil, only Costa Rica and El Salvador spend more than 1% of GDP in this area, according to the survey. All international data cited is from 2021 and comes from databases from the Organization for Economic Cooperation and Development (OECD) and the International Monetary Fund (IMF).

Pacheco promises to enact PEC with sanction of project that limits super salaries

Given the negative repercussions of the advancement of the PEC, Pacheco, main sponsor of the text, said that, if approved by Congress, the proposal will only be enacted if bill 2,721/2021, which regulates salaries above the constitutional ceiling, is also sanctioned. called super salaries. The promise had already been made in November 2022.

“There is a commitment of mine, as president of the Senate and the National Congress, that the structuring of the careers of the Judiciary and the Public Ministry, with the valorization of time in the judiciary due to the exclusive dedication they have, will only be enacted, in the eventuality of consideration by the Senate and Chamber, if there is approval of the bill that defines compensation amounts and that puts an end to super salaries in Brazil”, said the senator in a press conference last Tuesday (23).

The president of the Senate also said that the five-year PEC is limited to the budget of the bodies affected by the measure, and not to the Union Budget. “I consider the proposal very important. It is limited to the budget of the bodies themselves and applied to careers that have specificities. The economics of the bill to end super wages are superior”, continued Pacheco.

The government is negotiating with Pacheco and the PEC rapporteur, Eduardo Gomes (PL-TO), the possibility of changing the text in the House plenary, restricting the categories benefiting from the additional for length of service. The president of the Senate would be willing to “dehydrate” the proposal to reduce the government’s resistance to its approval.

PEC of the five-year period does not have the support of Lira in the Chamber

On Wednesday (24), the president of the Chamber, Arthur Lira (PP-AL), in turn, said that the matter would be unlikely to progress in the House, if it is approved in the Senate plenary. “An issue like the Quinquennium PEC is unlikely to progress in the Chamber,” he stated, in a debate organized by the Confederation of Brazilian Business and Commercial Associations (CACB), in Brasília.

The following day, he returned to the subject, in an interview with GloboNews. “Each with their own responsibilities. It was not the Chamber that guided the Five-Year Year. Everyone who decides their own things, who is responsible for them, it cannot be said that the Chamber has decided on a project that is still a bombshell today. […] Given the numbers that the Treasury puts forward, which can vary from R$40 to R$80 billion, it is more than a bombshell”, he stated.

To come into force, a PEC must go through plenary discussion sessions and be voted on in two rounds in each House of Congress. The piece is only considered approved if it obtains at least three-fifths of the votes (308 deputies and 49 senators) in each of the rounds. If approved, the PEC is promulgated by Congress and its text is inserted as an amendment to the Constitution.

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